A few weeks ago I wrote Campus Economics 101, describing the ways that students on university campuses are being directly affected by the current economic climate. Now, it’s time to progress on to 201, and discuss how colleges themselves are handling the situation.

As high school seniors across the country scramble to visit the schools they’ve been accepted to and to weigh the benefits and weaknesses of each college, financial aid offices are struggling to retain current students while still bringing in a strong freshman class. Reports in January suggested that the value of college endowments had dropped on average 23%, the worst fall in over thirty years, and most financial aid offices agree that the worst is yet to come, as alumni and other donors tighten their wallets for the first whole fiscal year after the stock market downturn. According to an October 2008 study,  75% of students are now “worried” or “very worried” about how they will pay for their college education, and 33% have decided to take on another job to help cover costs.

Harvard University’s loss of $8 billion as the economy plummeted has been discussed in dozens of news articles over the past nine months, only a few of which mentioned that that number alone is larger than the entire endowments of all but six other colleges. As Harvard and Yale’s promises to expand financial aid for middle-income students hit hard by the recession are shouted to the heavens, smaller private colleges are quietly struggling to keep their doors open.

In a letter to the community at large, the President of Vassar College announced a temporary freeze on non-essential hiring, a revaluation of all capital projects and potential cuts to operating expenses. Likewise, the Office of the President at Grinell College issued a statement that “Moving forward, the College is going to have to concentrate on having more balanced revenues… We also need to keep tuition and fee revenues aligned with costs, since tuition and fees make a critical contribution to our budget,” and Washington and Lee University promised to “limit capital investment to either those projects with fully supported funding sources or those that must be done to maintain the integrity and safety of facilities and programs,” and to “evaluate positions to ensure that vacancies or allocation of funds to new positions are targeted toward meeting the University’s strategic objectives.”

Many private colleges announced a few months ago that they planned on admitting more students into the class of 2013 to make up for an anticipated drop in enrollment, even as public universities (like the University of Florida) admit fewer students out of concern that a higher percentage will matriculate. Robert Massa, Vice President for Enrollment at Dickinson College told the Washington Post that the current climate “makes it very, very difficult for us to project our classes,” echoing statements made by many other college officials across the nation. Some schools, like MIT and the University of Maine are cutting sports teams to make up for budget defects, others are putting plans for new buildings or faculty positions on hold, or reducing spending on non-essential administrative positions.

It will be almost impossible to tell accurately how the economy has changed college enrollment until students arrive on campuses in September, and many colleges are wooing students even after they’ve sent in deposits, worried about the “melt” effect, when students who’d declared their intent to enroll at one school reevaluate their situation over the summer and pull out.

Until the fall, admissions officers and financial aid advisors will be waiting on pins, watching hourly as the world shifts around them.

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